Greg Mankiw's Blog: Ed Gleaser on Subsidized Mortgages

Greg Mankiw's Blog: Ed Gleaser on Subsidized Mortgages

America's housing woes are, in part, the legacy of government policies that pushed consumers to borrow and banks to lend. The home mortgage interest deduction encouraged people to make leveraged bets on housing, which looks silly today amidst the wreckage of over-hyped housing markets. Since the New Deal, the federal government has thought that it was a nifty idea to use its borrowing power to encourage home buying through government-sponsored agencies like Fannie Mae and Freddie Mac. The political beauty of such policies was that they subsidized borrowing and buying in a way that could be kept off the balance sheet. For years, policy makers maintained the fiction that Freddie and Fannie didn't cost taxpayers anything.

Yes root is rotten every leaves uselessly tattle tootle. I think the problem is that most policy wonkers time fillers. Nice cozy salary man thinks themselves. Gives away consults to do jobs for them. No one foresee what is going to happen 30 years after if they screwed up policies. complex creates administration nightmare-monsters - next come they don’t want to do anything else because “too risky and too hard for them to do dirty job” and also don’t want to be an outsider, “not singing same song” as others. This going on on…. Work that truly touches our heart we than least can think bit more kind way all around us, bit further not just where you stand and a pay check.